Indonesia’s Economy Grows 5.12% in Q2, Fueled by Manufacturing and Tourism Surge
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JAKARTA, Investortrust.id — Indonesia’s economy expanded by 5.12% in the second quarter of 2025 compared with the same period a year earlier, driven by a strong rebound in manufacturing, rising household consumption, and a surge in tourism-related services.
The figure, released by Statistics Indonesia (BPS) on Tuesday, marks the country’s fastest annual growth rate since the third quarter of 2023. On a quarterly basis, gross domestic product (GDP) increased 4.04%.
GDP at current prices reached Rp 5,947 trillion ($386 billion), while GDP at constant 2010 prices stood at Rp 3,396.3 trillion ($220.6 billion).
“This growth was primarily supported by manufacturing, agriculture, trade, construction, and mining, which together contributed 63.59% to total GDP,” said BPS Deputy for National Accounts and Statistical Analysis Moh Edy Mahmud during a press briefing in Jakarta.
Manufacturing Sector Leads Economic Expansion
The manufacturing sector remained the single largest contributor to the economy, accounting for 18.67% of GDP with annual growth of 5.68%. It contributed 1.13 percentage points to the overall GDP growth in the second quarter.
Key drivers within the manufacturing sector included food and beverage, basic metals, and pharmaceuticals. Food and beverage manufacturing grew 6.15% amid robust domestic and export demand for palm oil, cooking oil, processed foods, and beverages. Basic metal production jumped 14.91% due to rising overseas demand for steel and iron, while the pharmaceutical segment rose 9.39% on increased domestic and international demand for medicine and chemical products.
Tourism Boom Boosts Service Sectors
The fastest-growing sector was “other services,” which surged 11.31% year-on-year, supported by increased recreational activity during the Eid holidays, school vacations, and domestic travel.
Transportation and warehousing rose 8.52%, and corporate services grew 9.31%. The accommodation and food services sector expanded 10.17%, while transportation and logistics surged 9.56%, fueled by a 22.32% rise in tourist mobility and a 13.96% increase in domestic tourism compared to last year.
“These travel trends boosted demand for transportation and logistics services, which in turn lifted overall economic activity,” Edy noted.
Investment and Household Spending Remain Strong
From the expenditure side, household consumption and gross fixed capital formation (investment) together accounted for 82.08% of total GDP. Household consumption rose 4.97% year-on-year, reflecting resilient domestic demand.
Investment, or gross fixed capital formation, climbed 6.99% in the second quarter, while government spending contracted slightly by 0.33%. The export sector also showed solid growth, rising 10.67% annually, with imports growing even faster at 11.85%.
Non-profit institutions serving households (NPISH) saw a 7.82% increase in consumption.
Sectoral Dynamics: Agriculture Slows, Construction and Mining Improve
The agriculture sector—representing 13.83% of GDP—grew by 1.65%, a notable slowdown from 3.25% in the same quarter last year. The decline was attributed to shifting harvest patterns, with more output concentrated in the first quarter of 2025 compared to the second quarter last year.
The trade sector expanded 5.37%, bolstered by higher flows of domestic and imported goods to meet consumption demand. Construction grew 4.98%, driven by increased private and household spending, as evidenced by higher building material imports and cement procurement. Mining posted 3.17% growth, with a GDP share of 8.78%.
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